Method and system for gainsharing of physician services

ABSTRACT

The invention relates to a method and system of physician economic performance evaluation in which the relative medical difficulty associated with patients admitted by a particular physician is determined and, given that measurement, judgments made concerning the relative amount of inpatient resources that the physician required. Also, one application of the present invention relates to a method for gainsharing of physician services using a surplus allocation methodology for rewarding physicians in relation to their performance. An incentive pool is determined from previous patient claims and payments made to physicians in advance, such as in a base year. Best practice norms are established for a plurality of classified diagnosis groups. In one embodiment of the present invention, the classified diagnosis related groups are adjusted for severity of illness to compensate for actual clinical challenges faced by individual physicians. The best practice norms can be used in the surplus allocation method for determining physician performance. The incentive is established proportional to the relationship between a physician&#39;s individual performance and the best practice norm.

[0001] This application claims priority of U.S. Provisional ApplicationNo. 60/349,847 filed Jan. 17, 2002 hereby incorporated in its entiretyby reference into this application.

BACKGROUND OF THE INVENTION

[0002] 1. Field of the Invention

[0003] The invention relates to a method and system of physicianeconomic performance evaluation in which the relative medical difficultyassociated with patients admitted by a particular physician isdetermined and, given that measurement, judgments made concerning therelative amount of inpatient resources that the physician required.Also, one application of the invention relates to a method and system ofgainsharing of physician services in which a best practice norm isestablished for a plurality of classified diagnosis groups and anincentive pool is distributed to physicians by comparing physicianperformance to the best practice norm while meeting constraints onincentive distribution.

[0004] 2. Description of the Related Art

[0005] Many strategies have been proposed and implemented that wereintended to contain the rising cost of health care. For example, overthe past decade, health maintenance organizations (“HMOs”) have receivedconsiderable attention. HMOs employ various strategies to incent and/orpenalize health care consumers (enrollees), hospitals and physicians.Physicians are particularly important because they exercise ultimatejudgment over medical decision—making. Consequently, HMOs employ acombination of strategies, such as “hands on” review over medicalutilization decisions, coupled with discounts on physician fees in orderto reduce physician costs, and to control the impact of physicians onother health care costs, such as hospital costs. These strategies aresometimes criticized as being indirect, complex and overly bureaucratic.

[0006] A different kind of healthcare cost containment strategy wasimplemented by Medicare in 1983: In that year, the federal program forthe elderly replaced “reasonable cost” reimbursement for acute carehospitals with “payment by the case”. Specifically, beginning in 1983,Medicare reimbursed hospitals a fixed price for each Diagnosis RelatedGroup (“DRG”). By reimbursing a fixed price for each DRG, hospitals werefurnished economic incentives to reduce resource utilization. Thepayment system was known as the Medicare Prospective Payment System, or“PPS”.

[0007] New Jersey acute care hospitals continue to suffer their worstfinancial distress in recent history. A report issued by the New JerseyHealth Care Facilities Finance Authority in June, 1999, suggests that alarge part of the problem is New Jersey's Medicare length of stay whichwas 1.6 days over the national average, at that time. The reportestimates that removing the costs associated with these excess dayscould save $600 million. Improved operational performance by hospitals,however, cannot be achieved without the active collaboration of thedoctors. To achieve this necessary partnership, the New Jersey HospitalAssociation (NJHA) proposes a Demonstration to test whether or notPerformance Based Incentives can improve the efficiency andeffectiveness of hospital inpatient care for Medicare fee for servicebeneficiaries.

[0008] Under the Medicare Prospective Payment System (PPS), prospectivepayment by the case referred to as Diagnosis Related Group, DRG providesacute care hospitals with incentives to control unnecessary resourceutilization. Diagnosis Related Groups (“DRGs) is a system of patientclassification utilized by the federal government to pay hospitals.Under the Medicare Prospective Payment System (“PPS”), DRGs are utilizedto pay hospitals a fixed price per case. Physicians, however, exerciseultimate control over such decisions and unfortunately, in thisparticular regard, the Medicare fee for service payment system thatgoverns the reimbursement for physicians contains financial incentivesto provide more services, even when medically unnecessary. Attempts toresolve this conflict of economic incentives have been unsuccessful.Medicare risk-based systems have failed to gain the confidence of bothproviders and beneficiaries.

[0009] Gainsharing has been a primary objective of the healthcareindustry for many years. The need to align the economic incentives ofhospitals and doctors (any payors) has grown more urgent as the economicfortunes of all parties have deteriorated. Pursued by many, it seemedthat the goal was close to realization in the late 90s: Unofficialcommunication from the Office of Inspector General (OIG) seemed torecognize the importance of taking this next step. These hopes weredashed, however, when the OIG issued a formal statement in 1999indicating that, while potentially of great value, “ . . . regulation ofgainsharing arrangements requires clear, uniform, enforceable andindependently verifiable standards applicable to all affected parties .. . ”

[0010] In a seeming reversal of its prior position, on Jan. 11, 2001 theHHS Office of Inspector General (OIG) suggested that it would permit theuse of properly structured gainsharing arrangements to reduce hospitaloperating costs. Although gainsharing arrangements take numerous forms,they most often relate to services furnished within a single clinicalspecialty (e.g. cardiac surgery or oncology) and are executed directlybetween a hospital and one of the following individuals or groups: oneor more individual physicians providing service in the clinicalspecialty; one or more group practices composed exclusively ofphysicians furnishing care in the clinical specialty at the hospital; ora single entity representing all staff or employed physicians furnishingcare in the clinical specialty at the hospital.

[0011] Gainsharing arrangements typically include several commonelements. The hospital contracts with participating independentconsultants or physicians to analyze current operational practiceswithin the clinical specialty. These practices include supply use,equipment use, operating room use, ancillary-service use, formularyrestrictions, clinical protocols, nonphysician staffing, scheduling ofprocedures, bed-use review, and discharge assessment.

[0012] The physicians are expected to comply with standard policies,procedures, and protocols that reflect best practices as determined byclinical consultants. These best practices are reviewed and revised, asnecessary, by physicians practicing in the clinical specialty to ensurethat they are consistent with quality care. Any reduction in operatingcosts in the clinical specialty is documented by the hospital over aspecified period after implementation of the best practices. Thehospital then monitors whether the participating physicians meetmutually agreed-upon, objective benchmarks called quality safeguards forquality of care and patient satisfaction. Finally, if such qualitysafeguards are met, the participating physicians are paid a fixedpercentage of the reduction in operating costs associated withimplementation of the best practices.

[0013] It is desirable to provide an improved method and system forevaluating physician performance which can be the foundation for variouscost containment strategies, such as gainsharing of physician services.

SUMMARY OF THE INVENTION

[0014] Conventionally, diagnosis related group classifications have beenused to determine of fixed price per case to pay hospitals. The presentinvention applies classified designated groups to physicians to evaluatephysician economic performance. The physician economic performance canbe determined by a comparison of relative resource consumption amongphysicians, given a certain type of classified patient DRG, which can beadjusted for severity of illness (SOI). The SOI adjustment isadvantageous in fairly determining economic performance of physicians,because individual physicians may attract a more difficult case mixbecause of skill or reputation.

[0015] It was found that a successful healthcare cost containmentstrategy (PPS, HMO, or other) begins with the physician who is themedical decision maker. The present invention involves the first step inthat strategy, physician performance evaluation, as well as itsapplication, for example, incentive based compensation. The presentinvention provides a methodology for evaluating the relative consumptionof inpatient resources of individual physicians, adjusted for case-mix,and severity of illness. Physician economic performance can be evaluatedutilizing classified DRGs uniquely sensitive to the varying medicaldifficulty presented by cases within a DRG category, such as All PatientRefined Diagnosis Related Groups or other systems of patientclassification that is adjusted for severity of illness. Accordingly,the present invention can evaluate the relative medical difficultyassociated with the patients admitted by a particular physician and,given that measurement, can make judgments concerning the relativeamount of inpatient resources that the physician required.

[0016] Physician economic performance evaluation provides the foundationfor various cost containment strategies. It can be used simply toprovide information to physicians, hospitals (HMOs, and consumers.) Asset forth in the present invention, it can be linked to economicincentives in order to directly influence physician behavior. Alternatevariations can be developed from the same foundation, for example, fixedrates per case for physicians. The various applications can beimplemented by hospitals (as described herein), by the government, byHMOs or by consumers. All of these applications begin, however, withobjective physician economic performance evaluation.

[0017] The present invention utilizes routinely collected data of theuniform bill (UB) which is issued for every patient in every acute carehospital, pursuant to federal law, and the Medicare cost report. Typesof healthcare providers can be identified from the uniform bill. Thetypes of healthcare providers can include Responsible Physician,Hospital Based Physician, such as Radiologist, Anesthesiologist,Pathologist, Consultant Physician, or Other. The identified healthcareproviders provide framework for determining and comparing physicianperformance in each identified health provider category.

[0018] The present invention provides methodologies that can be utilizedto compute physician costs (Part B) and incentive payments, based onpayments to hospitals (Part A). Referred to as “Part A/B ratios”, thesemethodologies are able to utilize payments to hospitals (Part Apayments) to determine: (1) the total incentive pool of money availablefor rewards and incentives to physicians under a given set ofconstraints; (2) the total identified amount available to the variouscategories of healthcare providers; (3) within the pool available forpayments to the Responsible Physicians, provide separate pools availablefor medical admissions and surgical admissions; (4) the amount ofresources required by each physician to treat his/her own, case-mix isadjusted for severity of illness, and (5) the best practice norm (BPN)for each patient category, such as classified by APR DRG and for eachhealthcare provider category, as described above. The A/B ratios enablethe method and system of the present invention to determineperiodically, using hospital (Part A) data, whether a physician'sperformance has improved or deteriorated relative to the BPN and, undera given set of rules, the amount of reward/incentive, or compensationfor loss of income, that a given physician might be entitled to. Variousreports can be generated that identify problem areas and opportunitiesfor improvement related to a given physician, at a given hospital, andwith respect to a given cost center, such as room and board, radiology,operating room.

[0019] Accordingly, the present invention evaluates physicianperformance utilizing routinely collected data, primarily the uniformbill. This may be contrasted with conventional systems that attempt toaccomplish the same objective utilizing other data which is usuallycustomized for this purpose. Conventional systems are typically far moreexpensive, and impose significant, additional data collection burdens onproviders. The method and system of the present invention is efficient,inexpensive and, because it relies on various data, ratios andcategories extracted from routinely collected information, easier toimplement than conventional systems. The economic physician performanceevaluation methodology can be linked to financial incentives designed to(1) reward physicians that are efficient, and (2) to incent physiciansthat are inefficient to become efficient. For example, the presentinvention could be used to develop fixed case rates for physicians(similar to the case rates that Medicare currently uses to reimbursehospitals.) Alternatively, the economic physician evaluation can be usedin gainsharing of physician services, such as a demonstration forMedicare, proposed by the New Jersey Hospital Association which, ifapproved, would enable participating hospitals to (1) reward physiciansthat are efficient; and, (2) incent inefficient physicians to becomeefficient.

[0020] In one embodiment, the present invention relates to a method forgainsharing of physician services using a surplus allocation methodologyfor rewarding physicians in relation to their performance. An incentivepool is determined from previous patient claims and payments made tophysicians in advance, such as in a base year. Best practice norms areestablished for a plurality of classified diagnosis groups. In oneembodiment of the present invention, the classified diagnosis relatedgroups are adjusted for severity of illness to compensate for actualclinical challenges faced by individual physicians. The best practicenorms can be used in the surplus allocation method for determiningphysician performance. The incentive is established proportional to therelationship between a physician's individual performance and the bestpractice norm.

[0021] The amount available for distribution in the incentive pool islimited by an incentive constraint. For example, the incentiveconstraint can limit physician fees to twenty five percent (25%) of PartB fees associated with Medicare fee for service admissions at theDemonstration Sites, for complying with 42 CFR §417.479, Requirementsfor Physician Incentive Plans. This limitation, which is based uponsimilar restrictions applied in a conventional managed care context. Theincentive constraint is designed to strike a balance such that: (1) Theincentive is sufficient to overcome the natural incentives of fee forservice payments to provide more services, even when medicallyunnecessary and (2) The incentive is not so large as to encourage aphysician to withhold medically necessary services. The incentive poolis distributed by comparing current physician performance for one of theclassified diagnosis related groups to the established best practicenorm.

[0022] In an embodiment, the incentive pool is subdivided into incentivepools for the classified healthcare providers, such as responsiblephysicians, hospital based physicians and consulting physicians. Theresponsible physician pool is further divided into a sub pool formedical admissions and surgical admissions for the classified diagnosisrelated groups.

[0023] Particularly in regard to medical admissions, a physician whoseresource utilization is above the Best Practice norm can be forced tosacrifice Part B income in order to implement steps to reduce hospitalcosts (This is because Part B fees associated with medical admissionsare sensitive to length of stay, and to the professional componentassociated with testing). To neutralize this effect, the Part B feesthat are related to follow-up physician visits that occur in regard tomedical admissions, after the initial consultation, but prior todischarge are identified. The fees can be identified separately by levelof severity, and multiplied by the length of stay savings projected foreach level of severity, (i.e., average Base Year experience compared toBest Practice Norm). In one embodiment, the method provides an incentivepool for improvements for compensation of physicians for loss of incomeresulting from improvements in efficiency related to the medicaladmissions and improved operational performance related to surgicaladmissions.

[0024] While participating in the surplus allocation, physicians aredirected to exercise their best clinical judgment in regard to each andevery patient to maintain quality of care. In general, the system ofphysician performance evaluation set forth in this application isadvantageous because it combines various attributes. The adjustment forseverity of illness addresses a primary concern raised by physiciansregarding the fairness and objectivity involved in economic performanceevaluation since certain physicians attract a more difficult case-mixbecause of skill or reputation. The present invention uses routinelycollected data. This eliminates the drawbacks of other systems whichtypically require the collection of data that imposes significant burdenand expense on providers. The present invention directed to evaluationof physician economic performance can be linked to various payment andeconomic incentive systems intended to influence physician behavior.

[0025] The invention will be more fully described by reference to thefollowing drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

[0026]FIG. 1 is a flow diagram of a method for gainsharing of physicianservices.

[0027]FIG. 2 is a flow diagram of a method for establishing bestpractice norms.

[0028]FIG. 3 is a flow diagram of a method of determining a coststatistic for a classified diagnosis related group for establishing thebest practice norm.

[0029]FIG. 4 is a flow diagram of a method for calculating healthcareprovider type percentages to be used in establishing incentive pools.

[0030]FIG. 5 is a flow diagram of a method for determining incentivepools.

[0031]FIG. 6 is a flow diagram of a method for distributing incentivepools.

[0032]FIG. 7 is a schematic diagram of a generated report.

[0033]FIG. 8 is a schematic diagram of a system for implementing themethod of gainsharing of physician services.

[0034]FIG. 9 is a flow diagram of a method for evaluating physicianeconomic performance.

[0035]FIG. 10 is a flow diagram of a method for determining physicianeconomic performance used in FIG. 9.

DETAILED DESCRIPTION

[0036] Reference will now be made in greater detail to a preferredembodiment of the invention, an example of which is illustrated in theaccompanying drawings. Wherever possible, the same reference numeralswill be used throughout the drawings and the description to refer to thesame or like parts.

[0037]FIG. 1 is a flow diagram of a method for gainsharing of physicianservices 10. In block 12, a best practice norm is established. The bestpractice norm is a standard used to identify efficient patterns ofresource utilization that are achievable by a group of physicians. Thebest practice norm is established for a classified Diagnosis RelatedGroup (DRG). The Diagnosis Related Groups are federally definedgroupings of hospital services. The DRG can be refined for inclusion ofseverity of illness information, such as All Patient Related DiagnosisRelated Groups (APR DRGs), as described below. The best practice norm isused for evaluating physician performance.

[0038]FIG. 2 illustrates an embodiment of a method for implementingblock 12 for establishing best practice norms. In block 20, base yearinpatient data is processed. The base inpatient data is all inpatientdata for one hospital or more than one hospital in a particular groupingduring a base timeframe, such as a base year. For example, the inpatientdata grouping can relate to all inpatient data of all hospitals in onestate, such as New Jersey or more than one state, such as theMid-Atlantic Region. Alternatively, the inpatient data grouping canrelate to inpatient data of hospitals in a portion of a state, such ashospitals in a particular county or a selected group of participatinghospitals.

[0039] In block 21, base year inpatient data is determined frominpatient claim information which is generated during inpatient stays athospitals or the like and include all claims associated with thepatient's stay in the hospital, such as room and board, prescriptiondrug claims, medical tests and the like. Inpatient claim information canbe derived from claim information entered on conventional UB92 formswhich are used by hospitals. In block 22, base year inpatient data isalso determined from cost reports, such as hospital cost reports. Inblock 23, the costs incurred per inpatient claim are determined from thepatient claim information and the cost reports to form a costed patientrecord. For example, the costs can be determined by industry standardcost accounting techniques, such as hospital-specific,cost-center-specific and ratio of costs to charges.

[0040] In block 24, the services provided in the inpatient claim areclassified into diagnosis related groups. The classification of thediagnosis related groups can be adjusted for severity of illness. In theadjustment for severity of illness, the DRGs can be further defined bydescribing each diagnosis in terms of four levels of medical severity(refinement classes). The calculation of a severity level for eachpatient within a DRG considers, for example, whether the DRG is agrouping of medical or surgical diagnoses, the patient's sex, thepatient's age, length of stay, whether the patient died within two daysof admission, and whether the patient was discharged against medicaladvice. For example, an infant requiring heart surgery and intensivecare for weeks is likely to place a greater drain on resources than amiddle-aged victim of a minor heart attack. Even though these patientsfall into the same DRG, the cost attributed to the treatment of each canbe more accurately analyzed due to the refining of the DRG. In thismanner, refined DRGs group patients according to resource intensity, andthus allow more accurate comparisons. For example, block 24 can beimplemented for classifying Medicare fee-for-service inpatients bydetermining All Patient Related Diagnosis Related Groups using Averill,R. F. et al., Version 15.0. Definition Manual, 3M Health InformationSystem, Wallingford, Conn., 1988, hereby incorporated by reference intothis application. Alternatively, a method for refining DRGs as describedin U.S. Pat. No. 5,652,842 hereby incorporated in its entirety byreference into this application, can be used to determine classifieddiagnosis related groups. It will be appreciated that in the presentdisclosure, classified DRGs are referred to as APR-DRGs and thatAPR-DRGs can refer to classified DRGs which can be determined by otherpatient classification methods.

[0041] In block 25, the classified services provided to a patient aregrouped by a responsible physician (RP). A RP is defined as thephysician most responsible for resource utilization while the patient ishospitalized. In one implementation, the identity of the RP can bedetermined based on a reference file provided with the implementation ofthe APR-DRG Grouper, using Averill,R. F. et al. described above. In theAPR-DRG grouping, all inpatient facility claims are classified as eithermedical or surgical. The following two physician fields on theconventional uniform bill (UB) 92 forms can be used in the RPdetermination process: Attending Physician referenced by Form Locator 82and other physician referenced by Form Locator 83. For example, theother physician can be the surgeon.

[0042] A method for the determination of the RP is as follows:

[0043] 1) If the APR-DRG assigned is 469, 470, 468, 476, or 477, whichare ungroupable patient DRGs, such as a procedure with unrelateddiagnosis or a coding error, there is no RP assigned;

[0044] 2) If the APR-DRG is surgical, the RP is the first entry in theother physician location. If the other physician location is empty, theattending physician is used;

[0045] 3) If neither 1 nor 2 above apply, the RP is the attendingphysician;

[0046] 4) If the attending physician is empty, then no RP is assigned.

[0047] Blocks 21-25 are repeated for each patient inpatient claim forall hospitals in the hospital grouping. In block 26, a best practicenorm (BPN) is established for each classified diagnosis related group,such as each APR-DRG. The BPN for each APR-DRG can be determined usingthe APR-DRG Analytical Workstation User Manual, 3M Health InformationSystem, Wallingford, Conn. 19881.

[0048]FIG. 3 illustrates an embodiment of a method for implementingblock 26 for determining a BPN. In block 30, a normative APR-DRGexpected cost statistics is computed based on all inlier cases with noerrors in the standard manner (ratio of cost to charges) using theresults of block 23 and block 24.

[0049] In block 31, for each physician determined in block 25, therelationship to the APR-DRG expected cost statistic is determined. Therelationship to the APR-DRG expected cost statistic for each physiciancan be determined from the number of cases from block 21 assigned to anRP in block 25, the percent of cases from block 21 assigned to an RP inblock 25 for a particular APR-DRG grouping and the percent difference ofactual patient cost from the standard norm APR-DRG expected cost for aparticular APR-DRG grouping, referred to as a product line.

[0050] In block 32, a physician list is ordered in ascending order basedon the percent difference between actual cost and norm expected costdetermined in block 31 such that the physician with actual cost mostbelow the expected cost is ordered first in the list. Excluded from thephysician list are any attending physicians that have a number of caseswithin the particular APR-DRG grouping lower than a predeterminedthreshold of number of physician cases. For example, the threshold ofthe number of physician cases can be determined to be 10 such that ifthe physician has less than 10 cases within the particular product line,the physician is not included in the ordered list.

[0051] For illustration purposes, the ordered list is determined whichis labeled A through Z. Starting at the first physician in the list(Physician A), the list of physicians is descended and the number ofclaims for each physician is accumulated until the sum of cases is equalto a predetermined threshold of physician claims. For example, thepredetermined threshold of physician claims can be determined to exceed25% of the total cases. Assuming that Physician G is the physician whosecases result in the 25% of the total cases threshold of physician claimsbeing met, Physicians A through G define the subset of patients that areincluded in the best practice norm for a particular product line.

[0052] In block 33, the number of attending physicians in the selectioncriteria of a product line for the best practice norm is compared to apredetermined threshold of the number of physicians meeting a selectioncriteria best practice norm. For example, the predetermined number ofphysicians meeting a selection criteria best practice norm can be fiveattending physicians. Accordingly, in block 34, if the number ofattending physicians in the selection criteria is less than thethreshold of the number of physicians meeting a selection criteria bestpractice norm, then no best practice norm is computed for that productline. An indication that the best practice norm has not been determinedcan be provided.

[0053] If the number of attending physicians in the selection criteriafor the best practice norm is greater than the threshold of the numberof physicians meeting a selection criteria best practice norm, theAPR-DRG cost statistic is recomputed in block 35. Using the subsets ofpatients defined in blocks 31-33, assigned to a physician on the orderedlist whose cases meet the threshold of the number of physicians, thethreshold of physician claims and the threshold of the number ofphysicians meeting the selection criteria best practice norm, the normvalue for each APR-DRG cost statistics determined from block 31 arerecomputed. In essence, the attending physicians with the bestperformance (i.e., most below expected value) are used to recompute thebest practice norm value for expected cost of the APR-DRG.

[0054] Blocks 30-35 are repeated independently for the APR-DRGs groupedin each product line to establish the BPN for each APR-DRG. The BPN canbe determined only for a minimum number of cases for each APR-DRGgrouping. For example, a BPN can be determined if there are at least 3cases for a particular APR-DRG determined in block 31.

[0055] Referring to FIG. 2, data A 27 is collected for the determinedBPN from block 35 of FIG. 3. In block 28, data A 27 is stored. In block29, the data is presented. For example, the data can be presented bygenerating a report for visually displaying data A 27.

[0056] Referring to FIG. 1, a surplus allocation methodology isimplemented in block 13 for establishing incentive pools and in block 14for determining distribution of the incentive pools.

[0057] An implementation of block 13 for establishing incentive pools isshown in FIG. 4. and FIG. 5. FIG. 4 illustrates a method for calculatinghealthcare provider type percentages, such as percentages of responsiblephysician (RP), consultant physician (CP) and hospital based physician(HBP), which is determined by the APR-DRG. The HBP can compriselaboratory, radiology and anesthesiology.

[0058] In block 40, an inpatient claim is directed as input to block 41.In block 41, the inpatient claim is classified into a DRG refined toinclude severity of illness, such as an APR-DRG.

[0059] Physician bills block 42 associated with an inpatient claim aredirected as input to block 43. For example, physician bills arerepresented on Health Care Financing Administration (HCFA) 1500 claimforms. Block 43 links the classified patient claim data from block 41with associated physician billing from block 42.

[0060] In block 44, merged data of the physician billing data and theclassified inpatient claim data are assigned to one of the classes ofphysicians such as RP, CP or HBP. An implementation of block 44 is asfollows:

[0061] Hospital Based Physicians (HBP) are determined as all physicianswho perform a surgical procedure, including operative manual methods,incisions(s) of the body, internal manipulation and/or removal ofdiseased organ or tissue and can be determined as all physicians fromthe Anesthesiology department with a surgical CPT code between 10000 and69999 that are associated with a surgical procedure. These physicianline items can be categorized as “anesthesia hospital based physicians”.HBP are also determined as all physicians from the Radiology departmentwho use ionizing radiation, radioactive substance or magnetic resonancein the diagnosis and treatment of disease and can be determined as allphysicians with a CPT code between 70000 and 79999 or between 93000 and93550. These physician line items can be categorized as “radiologyhospital based physicians”. HBP are also determined as all physiciansfrom the Pathology and Laboratory department who perform scientificstudies on blood, body fluids, tissue and microscopic organisms for thepurpose of diagnosis of illness and disease and can be determined as allphysicians with a CPT code between 80000 and 89999. These physician lineitems can be categorized as “pathology hospital based physicians”. HBPare also determined as all other physician line items that do not meetthe above criteria that have the same physician ID that has beenidentified as a hospital base physician. These physician line items canbe categorized as “other hospital based physicians”.

[0062] If the responsible physician can not be determined from theattending physician referenced by Form Locator 82 and other physicianreferenced by Form Locator 83, Responsible Physician (RP) on SurgicalClaims can be determined when there is only one physician with asurgical CPT code (10000-69999) that has not been already identified asan Anesthesiologist. The physician's line items can be labeled as RP.When there is more than one physician associated with an inpatientadmission who performs a surgical procedure, including operative manualmethods, incisions(s) of the body, internal manipulation and/or removalof a diseased organ or tissue and can be determined as all physicianswith a surgical CPT code (10000-69999) that has not been alreadyidentified as an Anesthesiologist, the physician with the highestcharges is identified as the RP. When there is more than one physicianassociated with an inpatient admission who performs with a surgical CPTcode (10000-69999) that has not been already identified as anAnesthesiologist and all of these physicians have the highest charges,the physician with the most number of CPT codes is identified as the RP.

[0063] Responsible Physician (RP) on Medical Claims in which treatmentwhich does not require surgical intervention in the provision of careare determined when there is only one physician not already identifiedas a HBP or CP. The physician's line items are labeled as RP. When thereis more than one physician not already identified as a HBP or CP, thephysician with the highest number of CPT codes is identified as RPsurgical claims or as medical claims.

[0064] In situations when more than one physician can be identified asthe RP, the claims can go through an external review and a manualassignment of the RP can be determined.

[0065] Consulting Physicians (CP) are determined as physicians whoprovide expertise in one or more specialties to the responsiblephysician when such expertise is outside the responsible physician'sarea of expertise and can be determined as all physicians with all lineitems with a CPT code between 99251 and 99274 and not already identifiedas a HBP. Also, after the RP and HBP been assigned, the remainingphysician line items are identified as CP.

[0066] Blocks 40-44 are repeated for all inpatient claims. In block 45,input of the RP for each classified DRG, such as APR-DRG, is directed toblock 46. Block 46 combines all RP claims by the classified DRG, such asAPR-DRG. In block 47, a percentage of the sum of RP claims by APR-DRG tothe total percentage of physician claims defined as the total claims forRP, CP and HBP is determined.

[0067] In block 48, input of consultant CP for each classified DRG, suchas APR-DRG, is directed to block 49. Block 49 combines all CP claims byAPR-DRG. In block 50, a percentage of the sum of CP claims by APR-DRG tothe total percentage of physician claims is determined.

[0068] In block 51, input of HBP for each classified DRG, such asAPR-DRG, is directed to block 52. Block 52 combines all HBP claims byAPR-DRG. In block 53, a percentage of the sum of HBP claims by APR-DRGto the total percentage of physician claims is determined.

[0069] Data B 54 of the % RP by APR-DRG, data C 55 of the % CP byAPR-DRG and data D 56 of the % HBP by APR-DRG are stored in block 57. Inblock 58, the data is presented. For example, a report can be generatedof the break down of percentages for the types of physicians.

[0070]FIG. 5 is an implementation of block 13 of a method fordetermining incentive pools. In block 60, a ratio of the hospital costto the physician fee from patient claims is determined. For example, aratio can be determined between the average Part A costs associated withMedicare admissions by APR-DRG and the average Part B costs associatedwith Medicare admissions by APR-DRG, such as from a costed UB-92resulting in an A/B ratio. In block 61, the total estimated physicianpayments, such as Part B payments are determined by applying the A/Bratio to the total Part A payments. In block 62, a total physicianincentive pool is determined to be consistent with an incentiveconstraint. For example, the Part B fees can be limited to an incentiveconstraint of 25% to be consistent with 42 C.F.R. §417.479 requirementsfor incentive plans, as described above.

[0071] Data B 54 of the % RP by APR-DRG, data C 55 of the % CP byAPR-DRG and data D 56 of the % HBP by APR-DRG is applied to the totalphysician pool to distribute the incentive pool between determined typesof physicians RP, CP and HBP in respective blocks 64, 65 and 66. Inblock 67, the determined RP incentive pool is proportioned between amedical incentive pool of block 68 and surgical incentive pool of block69. In block 67, a loss of income (LOI) pool is subtracted from thetotal RP incentive pool. The LOI is used in an improvement pool at eachlevel of severity to reimburse physicians for loss of income resultingfrom improvements in efficiency related to the medical admissions. Thebalance left in the RP incentive pool is divided between a medicalperformance pool of block 71 and a surgical incentive pool of block 69.The amount of distribution into the medical performance pool and thesurgical incentive pool can be based on a ratio of the total medical RPfees received to the total surgical RP fees received.

[0072] In block 70, the medical incentive pool is subdivided into amedical performance pool in block 71 and a medical improvement pool inblock 72. In block 71, the medical performance pool is determined as thetotal RP incentive pool determined in block 64 less the LOI pool setaside in block 67 and less the surgical incentive pool determined inblock 69. In block 72, the medical improvement pool is determined as theLOI pool which was set aside in block 67. In block 73, a maximum medicalperformance incentive per case is determined for each classified DRG.such as APR-DRG, based on relative costliness of each APR-DRG.

[0073] Data E 75 of the maximum medical performance incentive per caseis stored in block 76. In block 74, a maximum medical improvementincentive is determined as improvement in operational performance foreach classified DRG, such as APR-DRG. Data F 77 of the maximum medicalimprovement incentive per case is stored in block 78.

[0074] Block 79 apportions a surgical performance pool of block 80 witha surgical improvement pool of block 81. For example, the surgicalincentive pool of block 79 can be divided in half with 50% being used inthe surgical performance pool of block 80 and 50% being used in thesurgical improvement pool of block 81. In block 82, a maximum surgicalperformance incentive is determined by each classified DRG, such asAPR-DRG, based on relative costliness to other APR-DRGs. Data G 83 ofthe maximum surgical performance incentive per case is stored in block84. In block 85, a maximum surgical performance incentive is determinedby improvement in operational performance for each classified DRG, suchas APR-DRG. Data H 80 of the maximum surgical improvement incentive percase is stored in bock 87.

[0075] The proportional amounts set aside in the LOI for the medicalimprovement incentive pool can be reduced over time as efficiency ofphysician increases under method 10. For example, initial amounts setaside in the medical improvement pool and the surgical improvement poolcan be reduced by 75% in the second year of implementation of method 10and 50% in the third year of implementation of method 10 with the 25%subtracted medical improvement pool and surgical improvement pool beingadded respectively to the medical performance pool and the surgicalperformance pool.

[0076] The following is an example of an implementation for determiningincentive pools:

EXAMPLE 1

[0077] 1. Total Part A payments at 13 hospitals=$695,480,857. Apply PartA/B ratios to determine total Part B payments, and apply 25% limit todetermine total pool available for incentive payments to physicians($33,314,292).

[0078] 2. Utilize RP identifiers and Part A/B ratios to determine amountof total incentive pool available for distribution to ResponsiblePhysicians ($22,561,127).

[0079] 3. Estimate payments for loss of income: Identify specific dollaramounts for physician inpatient visits (after initial consult, but priorto discharge) associated with medical admissions, by level of severity.Multiply fees by LOS savings projected for each level of severity andsum: $7,071,702.

[0080] 4. Subtract projected LOI ($7,071,702) from total pool availablefor distribution to RPs ($22,561,127) to determine total PerformancePool: $15,489,425.

[0081] 5. Apply Part A/B ratios to separate Part B payments toResponsible Physicians into: Medical: $30,037,866 Surgical: $60,206,642(Ratio of medical to surgical payments is 1 to 2)

[0082] 6. Utilize ratio of Part B payments determined in Step 5 todivide total Performance Pool into Performance Pool/Medical=$5,155,651;and Surgical Pool=$10,333,741.

[0083] 7. Split Surgical Pool into two equal pools: ImprovementPool/Surgical=$5,166,887; and Performance Pool/Surgical=$5,166,887.(Determine Maximum Physician Incentive for both Performance Pools<medical and surgical> by allocating to APR DRGs based on relativecostliness.)

[0084] 8. Convert LOI set aside ($7,071,702—Step 4) into ImprovementPool/Medical. (Total Pool Available=$22,561,127, less LOI (ImprovementPool/Medical) $7,071,702, less Surgical Pool $10,333,741, results inPerformance Pool/Medical of $5,155,651—Step 6.)

[0085] 9. Both Medical and Surgical Improvement Pools can be phased out:Year 1—100%; Year 2—75%; Year 3—50% and so forth until the ImprovementPool is merged entirely into the Performance Pool; and the sumssubtracted and merged into the respective Performance Pools.

[0086] An implementation of block 14 for distributing of an incentivepool determined for a responsible physician is shown in FIG. 6. In block90, current year inpatient data is determined from inpatient claiminformation, such as information entered on a conventional UB 92 form.In block 91, current year inpatient data is also determined fromhospital cost reports. In block 92, the costs incurred per patient claimare determined to form a costed patient record. For example, the costscan be determined by industry standard cost accounting techniques suchas hospital-specific, cost-center-specific and ratio of costs tocharges.

[0087] In block 93, the services provided in the inpatient claim areclassified into diagnosis related groups. The classification of thediagnosis related groups can be adjusted for the severity of illness.For example, block 93 can be implemented for classifying Medicarefee-for-service inpatients by determining All Patient Related DiagnosisRelated Groups using Averill, R. F. et al., Version 15.0. DefinitionManuel, 3M Health Information System, Wallingford, Conn., 1988, herebyincorporated by reference into this application. In block 94, theclassified services provided to a patient are grouped by responsiblephysician (RP). The identity of the RP can be determined as describedabove in reference to block 25. The identity of the admissions for theRP are determined to be medical in block 95 or are determined to besurgical in block 96.

[0088] In block 97, the performance of the medical RP is determinedusing data A 27 related to the best practice norm. A performance ratiois determined of the individual RP performance to the best practicenorm. A performance threshold can be determined to allow all physiciansto receive payments if their performance ratio is greater than theperformance threshold.

[0089] In block 98, a medical performance incentive is calculated usingdata E 75 of the maximum medical performance per case and theperformance ratio. In one embodiment, the performance threshold can alsoinclude a threshold of the number of patients admitted per physician.For example, a physician will not meet the performance threshold if thephysician admits less than 10 patients in the current year. The maximummedical performance per case is not available to the RP if thephysician's performance is determined to be lower than the performancethreshold. For example, the performance threshold can relate tophysicians at or below a percentile of physicians, such as the 90^(th)percentile of physicians. An example of a determined incentive can bedetermined as follows:$\frac{{{Percentile}\quad {Cost}} - {{Physician}^{\prime}s\quad {Actual}\quad {Cost}}}{{{Percentile}\quad {Cost}} - {{Best}\quad {Practice}\quad {Cost}}} \times {Maximum}\quad {Physician}\quad {Incentive}$

[0090] For example, the percentile cost can be for the 90^(th)percentile of physicians. In block 99, a medical improvement incentiveis calculated using data F 77 of the maximum improvement performance percase and a determination of improvement in operational performance. Theimprovement incentive can be determined by changes in cost to determinean improvement ratio. An example of a determined improvement incentivecan be defined as follows:$\frac{{{Base}\quad {Year}} - {{Actual}\quad {Rate}\quad {Year}}}{{{100^{th}\quad {Percentile}} - {{Best}\quad {Practice}}}\quad} \times {Per}\quad {Case} \times {{Percentile}\left( {{APR}{\quad \quad}{DRG}} \right)}{Incentive}$

[0091] Data F is related to the changes in Part B income from changes ininpatient cost driven by LOS determined by:

(Base Year LOS−Actual Year LOS)×Per Diem×Percentile

[0092] Accordingly, incentives are not paid for improvement beyond theBest Practice Norm.

[0093] The medical performance incentive determined from block 98 andthe medical improvement incentive determined from block 99 are totaledto determine a total medical incentive, in block 100.

[0094] In block 101, the performance of the surgical RP is determinedusing data A 27 related to the best practice norm. A performance ratiois determined of the individual RP performance to the best practicenorm. A performance threshold can be determined to allow all physiciansto receive payments if their performance ratio is greater than theperformance threshold. In block 102, a surgical performance incentive iscalculated using data G 83 of the maximum surgical performance per caseand the performance ratio. In block 103, an improvement incentive iscalculated using data H 86 of the maximum improvement performance percase and a determination of improvement of operational performance inthe same manner as block 99. The surgical performance incentivedetermined from block 102 and the surgical improvement incentivedetermined from block 103 are totaled to determine a total surgicalincentive, in block 104. Each of blocks 90-104 are repeated as neededfor all patients.

[0095] The distribution of an incentive pool determined for a consultantphysician in block 65 and for a hospital based physician in block 66 canbe determined in the similar manner, as described with regard to thedistribution of the incentive pool determined for a responsiblephysician. Alternatively, the incentive pool determined for a consultantphysician in block 65 and for a hospital based physician in block 66 canbe determined by discretion, for example by the responsible physicians,hospital or payer.

[0096] The following is an example of distribution from medicalperformance pool and the surgical performance pool:

EXAMPLE 2

[0097] Performance Pool/Surgical* Assume: 90^(th) Percentile = $33,709Best Practice Norm = $15,500 Maximum Physician Incentive =   $280Surgeon A actual cost = $15,500 Surgeon B actual cost = $18,877 SurgeonC actual cost = $26,967 Surgeon Perf $ A = $280$\frac{{{\$ 33}\text{,}709} - {{\$ 15}\text{,}500}}{{{\$ 33}\text{,}709} - {{\$ 15}\text{,}500}} = {\frac{{\$ 18}\text{,}209}{{\$ 18}\text{,}209} \times {\$ 280}}$

B = $228$\frac{{{\$ 33}\text{,}709} - {{\$ 18}\text{,}877}}{{{\$ 33}\text{,}709} - {{\$ 15}\text{,}500}} = {\frac{{\$ 14}\text{,}832}{{\$ 18}\text{,}209} \times {\$ 280}}$

C = $104$\frac{{{\$ 33}\text{,}709} - {{\$ 26}\text{,}967}}{{{\$ 33}\text{,}709} - {{\$ 15}\text{,}500}} = {\frac{{\$ 6}\text{,}742}{{\$ 18}\text{,}209} \times {\$ 280}}$

Performance Pool/Medical* Assume: 90^(th) Percentile = $12,000 BestPractice Norm =  $6,000 Maximum Physician Incentive =   $120 Physician Aactual cost =  $6,000 Physician B actual cost =  $7,000 Physician Cactual cost = $10,000 Physician Perf $ A = $120$\frac{{{\$ 12}\text{,}000} - {{\$ 6}\text{,}000}}{{{\$ 12}\text{,}000} - {{\$ 6}\text{,}000}} = {{6/6} \times {\$ 120}}$

B = $100$\frac{{{\$ 12}\text{,}000} - {{\$ 7}\text{,}000}}{{{\$ 12}\text{,}000} - {{\$ 6}\text{,}000}} = {{5/6} \times {\$ 120}}$

C =  $40$\frac{{{\$ 12}\text{,}000} - {{\$ 10}\text{,}000}}{{{\$ 12}\text{,}000} - {{\$ 6}\text{,}000}} = {{2/6} \times {\$ 120}}$

[0098] In block 105, a physician report of the total medical incentiveis generated. In block 106, a physician report of the total surgicalincentive is generated. An example of a physician report is shown inFIG. 7.

[0099]FIG. 8 illustrates a schematic diagram of system 200 forimplementing method 10. Base inpatient claim data 201, base cost reporthospital data 202 and base physician billing data 203 are provided toprocessor 204. Processor 204 is controlled by programming information toimplement all steps in method 10. Base inpatient claim data 201 is usedin block 21 and block 40 of method 10. Base cost report hospital data202 is used in block 22 of method 10. Base physician billing data 203 isused in block 42 of method 10.

[0100] Current inpatient claim data 205 and current hospital cost reportdata 206 are provided to processor 204. Current inpatient claim data isused in block 90 of method 10. Current hospital cost report data is usedin block 91 of method 10.

[0101] One or more databases 207 store data A 27, data B 54, data C 55,data D56, data E 75, data F 77, data G 83 and data H 86. One or morereports 208 are generated by method 10 and provided by processor 204.Reports 208 can be generated by block 29, block 58, block 105 and block106 of method 10.

[0102]FIG. 9 is a flow diagram of a method for evaluating economicperformance of a physician 200. In block 12, a best practice norm isestablished. Block 12 can be implemented with blocks 20-29 of FIG. 2 andblocks 30-35 of FIG. 3, as described above. In block 202, economicperformance of a physician is determined.

[0103] An implementation of block 202 for determining economicperformance of a physician is shown in FIG. 10. In block 210, currentyear inpatient data is determined from inpatient claim information, suchas information entered on a conventional UB 92 form. In block 211,current year inpatient data is also determined from hospital costreports. In block 212, the costs incurred per patient claim aredetermined to form a costed patient record. For example, the costs canbe determined by industry standard cost accounting techniques such ashospital-specific, cost-center-specific and ratio of costs to charges.

[0104] In block 213, the services provided in the inpatient claim areclassified into diagnosis related groups. The classification of thediagnosis related groups can be adjusted for the severity of illness.For example, block 213 can be implemented for classifying Medicarefee-for-service inpatients by determining All Patient Related DiagnosisRelated Groups using Averill, R. F. et al., Version 15.0. DefinitionManuel, 3M Health Information System, Wallingford, Conn., 1988, herebyincorporated by reference into this application. In block 214, theclassified services provided to a patient are assigned to a healthcareprovider classification. For example, data B 54 of the % RP by APR-DRG,data C 55 of the % CP by APR-DRG and data D 56 of the % HBP by APR-DRGcan be used to determine a RP, CP or HBP provider type, as describedabove. The identity of the admissions for the classified healthcareprovider are determined to be medical in block 215 or are determined tobe surgical in block 216.

[0105] In block 217, the performance of a healthcare provider for amedical admissions of a healthcare provider is determined using data A27 related to the best practice norm. In block 218, the performance of ahealthcare provider for a surgical service is determined using data A 27related to the best practice norm. A performance ratio is determined ofthe individual RP performance to the best practice norm. Each of blocks210-218 are repeated as needed for all patients.

[0106] In block 219, a physician report of the economic performance ofone or more physicians for a medical service is generated. In block 220,a physician report of the economic performance of one or more physiciansfor a surgical service is generated.

[0107] It is to be understood that the above-described embodiments areillustrative of only a few of the many possible specific embodimentswhich can represent applications of the principles of the invention.Numerous and varied other arrangements can be readily devised inaccordance with these principles by those skilled in the art withoutdeparting from the spirit and scope of the invention.

What is claimed is:
 1. A method for gainsharing of physician servicesbetween a plurality of physicians comprising the steps of: establishinga best practice norm for a plurality of classified diagnosis relatedgroups from base patient data; determining an incentive constraint of anamount of a payment made to said physicians which is available forgainsharing; determining an incentive pool from payments made to saidphysicians in advance associated with said plurality of classifieddiagnosis related groups up to said incentive constraint; anddetermining distribution of said incentive pool by comparing currentphysician performance associated with one of said classified diagnosisrelated groups to the established best practice norm for said one ofsaid classified diagnosis related groups.
 2. The method of claim 1wherein said payments made to physicians in advance is determined frompart B costs of a uniform bill and said incentive pool is determinedfrom a ratio of payments to a hospital determined from part A to saidpayments made to physicians determined from part B costs.
 3. The methodof claim 1 wherein said base patient data comprises inpatient data of aplurality of patients for one or more hospitals in a base time frame,said inpatient data comprises inpatient claim information and hospitalcost data.
 4. The method of claim 3 wherein said inpatient claiminformation is determined from a uniform bill (UB).
 5. The method ofclaim 3 wherein said step of establishing a best practice norm comprisesthe steps of: a. determining a costed patient record by combining saidinpatient claim information and said hospital cost data of a patient; b.assigning one of said classified diagnosis related groups to said costedpatient record; c. assigning a responsible physician to said costedpatient record; d. repeating steps a-c for each patient claim of saidbase patient data for determining an expected cost statistic for eachsaid classified diagnosis related group to form said best practice norm.6. The method of claim 5 wherein said step of determining an expectedcost statistic comprises the steps of: computing a normative expectedcost statistic; determining for each of said responsible physicians adifference of actual patient cost from said normative expected coststatistic; ordering a list of all said responsible physicians inascending order based on said differences of actual patient cost fromsaid normative expected cost statistic; determining a subset ofphysicians in said ordered list as physicians meeting a threshold ofphysician claims; and recomputing said normative expected cost statisticusing said subset of physicians in said ordered list and said differenceof actual patient cost from said expected cost statistic.
 7. The methodof claim 6 wherein the threshold of physician claims is 25% of a totalnumber of inpatient claims.
 8. The method of claim 6 further comprisingthe step of: excluding said responsible physicians from said orderedlist if each of said responsible physicians has a number of cases forsaid classified diagnosis group which is less than a threshold of anumber of physician cases.
 9. The method of claim 8 wherein thethreshold of a number of physician cases is less than three cases. 10.The method of claim 6 wherein before said recomputing step, furthercomprising the step of: determining if a number of said responsiblephysicians for said classified diagnosis related groups is greater thana threshold of a number of physicians meeting a selection criteria, andif said determined number of responsible physicians is greater than saidthreshold of a number of physicians meeting a selection criteria thenperforming said recomputing step, or if said determined number ofresponsible physicians is not greater than said threshold of a number ofphysicians meeting a selection criteria; indicating that said recomputedexpected cost statistic is not said best practice norm.
 11. The methodof claim 10 wherein before said recomputing step, further comprising thestep of: determining a minimum number of claims for each classifieddiagnosis related group, and if a determined number of claims for saidclassified diagnosis related group is greater than said minimum numberof claims then performing said recomputing step or if a determinednumber of claims for said classified diagnosis related group is lessthan said minimum number of claims; indicating that said recomputedexpected cost statistic is not said best practice norm.
 12. The methodof claim 1 further comprising the step of: adjusting said classifieddiagnosis related groups for severity of illness.
 13. The method ofclaim 1 wherein said classified diagnosis related groups are determinedas an All Patient Refined Diagnosis Related Group.
 14. The method ofclaim 1 wherein said step of determining said incentive pool furthercomprises the steps of: determining a weight or percentage of a type ofhealthcare provider for said classified diagnosis related group, saidtype of healthcare provider comprising a responsible physician,consultant physician and hospital based physician; determining apercentage of a sum of claims associated with said responsible physicianby said classified diagnosis related group to a total percentage ofphysician claims of said responsible physician, said consultantphysician and said hospital based physician to determine a percentage ofresponsible physician claims; and applying said percentage ofresponsible physician claims to said incentive pool for determining aresponsible physician incentive pool.
 15. The method of claim 14 whereinsaid step of determining a weight or percentage of a type of healthcareprovider type comprises the steps of: e. inputting data of inpatientclaims for a plurality of patients, f. classifying said inpatient claiminto one of said diagnosis related groups, g. inputting physicianbilling data associated with said classified inpatient claim, h. linkingsaid classified inpatient claim to said physician billing data to formmerged data of said physician billing data and said classified inpatientclaim, i. assigning said merged data to one of said healthcare providertypes, and j. repeating steps e-i for each inpatient claim.
 16. Themethod of claim 15 wherein said step of assigning said merged data tosaid healthcare provider type comprises the steps of: assigning aclassification of hospital based physicians selected from the groupconsisting of physicians who perform a surgical procedure, comprisingoperative manual methods, incision(s) of the body, internal manipulationand/or removal of a diseased organ or tissue; physicians who useionizing radiation, radioactive substances or magnetic resonance in thediagnosis and treatment of disease; and physicians who performscientific studies on blood, body fluids, tissue and microscopicorganisms for the purpose of diagnosis of illness and disease; assigninga classification of said responsible physician on surgical claimsselected from the group consisting of physicians who perform a surgicalprocedure, comprising operative manual methods, incision(s) of the body,internal manipulation and/or removal of a diseased organ or tissue thatare not identified as an anesthesiologist, said physicians havinghighest charges and said physicians having the highest charges andhaving a highest number of CPT codes; assigning a classification of aresponsible physician on medical claims based on a limitation selectedfrom the group having a physician not identified as a hospital basedphysician or consulting physician and a physician having a highestnumber of CPT codes; and assigning a classification of a consultingphysician who provides expertise in one or more specialties to theresponsible physician when such expertise is outside the responsiblephysician's area of expertise and not already identified as a hospitalbased physician.
 17. The method of claim 15 wherein said step ofassigning said merged data to said healthcare provider type comprisesthe steps of: assigning hospital based physicians based on a limitationselected from the group consisting of: all physicians having a surgicalCPT code 10000-69999 that are associated with a surgical procedure; allphysicians from the Radiology department with a CPT code between 70000and 79999 or between 93000 and 93550; all physicians having a CPT codebetween 80000 and 89999; and all other physician line items that have asame physician ID identified as a hospital based physician; assigningsaid responsible physician on surgical claims based on a limitationselected from the group consisting of: having a physician with asurgical CPT code (10000-69999) that is not identified as ananesthesiologist; having an inpatient admission with a surgical CPT code(10000-69999) that has not been already identified as ananesthesiologist; and said physician having highest charges; aninpatient admission with a surgical CPT code (10000-69999) that has notbeen already identified as an anesthesiologist; and as said physicianshaving the highest charges and having a highest number of CPT codes;assigning a responsible physician on medical claims based on alimitation selected from the group consisting of: having a physician notidentified as a hospital based physician or consulting physician and aphysician having a highest number of CPT codes; and assigning aconsulting physician based on a limitation selected from the group ofall physicians having a CPT code between 99251 and 99274 and not alreadyidentified as a hospital based physician and after the responsiblephysicians and hospital based physicians have been assigned remainingphysician line items.
 18. The method of claim 14 wherein said step ofdetermining said incentive pool further comprises the steps of:allocating said responsible physician incentive pool between a medicalincentive pool and a surgical inventive pool based on a ratio of a totalmedical payments received for medical claims from said classifieddiagnosis related groups and a total of surgical payments received forsurgical claims for said classified diagnosis related groups.
 19. Themethod of claim 18 wherein said step of determining said incentive poolfurther comprises the steps of: allocating said medical incentive poolbetween a medical improvement pool and a medical performance pool; andallocating said surgical incentive pool between a surgical improvementpool and a surgical performance pool.
 20. The method of claim 19 beforesaid step of allocating said responsible physician incentive poolfurther comprising the steps of: subtracting a loss of income pool fromsaid responsible physician incentive pool to form an adjustedresponsible physician incentive pool; allocating said adjustedresponsible physician incentive pool between said surgical incentivepool and said medical performance pool; and determining said medicalimprovement pool as said loss of income pool.
 21. The method of claim 20wherein said step of determining said incentive pool further comprisesthe steps of: determining a maximum medical performance incentive percase for each classified diagnosis related group; determining a maximummedical improvement incentive per case for each classified diagnosisrelated group; determining a maximum surgical performance incentive percase for each classified diagnosis related group; and determining amaximum surgical improvement incentive per case for each classifieddiagnosis related group.
 22. The method of claim 21 wherein saidphysician performance is determined from current patient data comprisingcurrent inpatient claim information and current hospital cost data. 23.The method of claim 22 wherein said step of determining distributionfurther comprises the steps of: determining a current costed patientrecord from said current patient data; assigning one of said classifieddiagnosis related groups to said current costed patient record;assigning a responsible physician to said current costed patient record;and categorizing said responsible physician into a medical responsiblephysician or a surgical responsible physician based on said currentcosted patient record.
 24. The method of claim 23 wherein a performanceratio is established for said compared current physician performance forone of said classified diagnosis related groups to the established bestpractice norm for said one of said classified diagnosis related groupsand wherein said step of determining said incentive pool furthercomprises the steps of: applying said performance ratio to said maximummedical performance incentive per case to determine a medicalperformance incentive; and applying said performance ratio to saidmaximum surgical performance incentive per case to determine a surgicalperformance incentive.
 25. The method of claim 24 wherein said medicalperformance incentive and said surgical performance incentive isdetermined by:$\frac{{{Percentile}\quad {Cost}} - {{Physician}^{\prime}s\quad {Actual}\quad {Cost}}}{{{Percentile}\quad {Cost}} - {{Best}\quad {Practice}\quad {Cost}}} \times {Maximum}\quad {Physician}\quad {Incentive}$


26. The method of claim 25 wherein said percentile cost is a 90^(th)percentile cost.
 27. The method of claim 21 wherein a ratio ofimprovement in operational performance is established and wherein saidstep of determining said incentive pool further comprises the steps of:applying said ratio of improvement in operational performance to saidmaximum medical improvement incentive per case to determine a medicalimprovement incentive; and applying said ratio of improvement inoperational performance to said maximum surgical improvement incentiveper case to determine a medical improvement incentive.
 28. The method ofclaim 27 wherein said medical improvement incentive and said surgicalimprovement incentive is determined by:${\frac{{{Base}\quad {Year}} - {{Actual}\quad {Rate}\quad {Year}}}{{100^{th}\quad {Percentile}} - {{Best}\quad {Practice}}} \times {Per}\quad {{Case}\left( {{APR}\quad {DRG}} \right)}{Incentive}}\quad$


29. The method of claim 27 further comprising the step of: determining atotal of said medical performance incentive, a total of said medicalimprovement incentive, a total of said surgical performance incentiveand a total of said surgical improvement incentive.
 30. The method ofclaim 29 further comprising the step of: generating a report of saidtotal medical performance incentive and said total medical improvementincentive for each said responsible physician.
 31. The method of claim29 further comprising the step of: generating a report of said totalsurgical performance incentive and said total surgical improvementincentive for each said responsible physician.
 32. A system forgainsharing of physician services between a plurality of physicianscomprising: means for establishing a best practice norm for a pluralityof classified diagnosis related groups from base patient data; means fordetermining an incentive constraint of an amount of a payment made tosaid physicians which is available for gainsharing; means fordetermining an incentive pool from payments made to said physicians inadvance for said plurality of classified diagnosis related groups up tosaid incentive constraint; and means for determining distribution ofsaid incentive pool by comparing current physician performance for oneof said classified diagnosis related groups to the established bestpractice norm for said one of said classified diagnosis related groups.33. The system of claim 32 wherein said payments made to physicians inadvance is determined from part B costs of a uniform bill and saidincentive pool is determined from a ratio of payments to a hospitaldetermined from part A to said payments made to physicians determinedfrom part B costs.
 34. The system of claim 32 wherein said base patientdata comprises inpatient data of a plurality of patients for one or morehospitals in a base time frame, said inpatient data comprises inpatientclaim information and hospital cost data.
 35. The system of claim 34wherein said inpatient claim information is determined for a uniformbill (UB).
 36. The system of claim 34 wherein said means forestablishing a best practice norm comprises: means for determining acosted patient record by combining said inpatient claim information andsaid hospital cost data of a patient; means for assigning one of saidclassified diagnosis related groups to said costed patient record; meansfor assigning a responsible physician to said costed patient record;means for repeating for each patient claim of said base patient data fordetermining an expected cost statistic for each said classifieddiagnosis related group to form said best practice norm.
 37. The systemof claim 36 wherein said means for determining an expected coststatistic comprises: means for computing a normative expected coststatistic; means for determining for each of said responsible physiciansa difference of actual patient cost from said normative expected coststatistic; means for ordering a list of all said responsible physiciansin ascending order based on said differences of actual patient cost fromsaid normative expected cost statistic; means for determining a subsetof physicians in said ordered list as physicians meeting a threshold ofphysician claims; and means for recomputing said normative expected coststatistic using said subset of physicians in said ordered list and saiddifference of actual patient cost from said expected cost statistic. 38.The system of claim 37 wherein the threshold of physician claims is 25%of a total number of inpatient claims.
 39. The system of claim 38further comprising means for excluding said responsible physicians fromsaid ordered list if said responsible physician has a number of casesfor said classified diagnosis group which is less than a threshold of anumber of physician cases.
 40. The system of claim 39 wherein thethreshold of a number of physician cases is less than three cases. 41.The system of claim 40 further comprising: means for determining if anumber of said responsible physicians for said classified diagnosisrelated groups is greater than a threshold of a number of physiciansmeeting a selection criteria, and if said determined number ofresponsible physicians is greater than said threshold of a number ofphysicians meeting a selection criteria then performing said means forrecomputing, or if said determined number of responsible physicians isnot greater than said threshold of a number of physicians meeting aselection criteria; means for indicating that said recomputed expectedcost statistic is not said best practice norm.
 42. The system of claim40 further comprising: means for determining a minimum number of claimsfor each classified diagnosis related group, and if a determined numberof claims for said classified diagnosis related group is greater thansaid minimum number of claims then performing said means for recomputingor if a determined number of claims for said classified diagnosisrelated group is less than said minimum number of claims; means forindicating that said recomputed expected cost statistic is not said bestpractice norm.
 43. The system of claim 32 further comprising: means foradjusting said classified diagnosis related groups for severity ofillness.
 44. The system of claim 32 further comprising means for storingsaid established best practice norm.
 45. The system of claim 44 whereinsaid means for storing said established best practice norm is adatabase.
 46. The system of claim 32 wherein said classified diagnosisrelated groups are determined as an All Patient Refined DiagnosisRelated Group.
 47. The system of claim 32 wherein said means fordetermining said incentive pool further comprises: means for determininga weight or percentage of a type of healthcare provider for saidclassified diagnosis related group, said type of healthcare providercomprising a responsible physician, consultant physician and hospitalbased physician; means for determining a percentage of a sum of claimsassociated with said responsible physician by said classified diagnosisrelated group to a total percentage of physician claims of saidresponsible physician, said consultant physician and said hospital basedphysician to determine a percentage of responsible physician claims; andmeans for applying said percentage of responsible physician claims tosaid incentive pool for determining a responsible physician incentivepool.
 48. The system of claim 47 further comprising means for storingsaid weight or percentage of said type of healthcare provider.
 49. Thesystem of claim 48 wherein said means for storing said weight orpercentage of said type of healthcare provider is a database.
 50. Thesystem of claim 47 wherein said means for determining a weight orpercentage of a type of healthcare provider type comprises: means forinputting data of inpatient claims for a plurality of patients, meansfor classifying said inpatient claim into one of said diagnosis relatedgroups, means for inputting physician billing data associated with saidclassified inpatient claim, means for linking said classified inpatientclaim to said physician billing data to form merged data of saidphysician billing data and said classified inpatient claim, and meansfor assigning said merged data to one of said healthcare provider types.51. The system of claim 50 wherein said means for assigning said mergeddata to said healthcare provider type comprises: means for assigning aclassification of hospital based physicians selected from the groupconsisting of physicians who perform a surgical procedure, comprisingoperative manual methods, incision(s) of the body, internal manipulationand/or removal of a diseased organ or tissue; physicians who useionizing radiation, radioactive substances or magnetic resonance in thediagnosis and treatment of disease; and physicians who performscientific studies on blood, body fluids, tissue and microscopicorganisms for the purpose of diagnosis of illness and disease; means forassigning a classification of said responsible physician on surgicalclaims selected from the group consisting of physicians who perform asurgical procedure, comprising operative manual methods, incision(s) ofthe body, internal manipulation and/or removal of a diseased organ ortissue that are not identified as an anesthesiologist, said physicianshaving highest charges and said physicians having the highest chargesand having a highest number of CPT codes; means for assigning aclassification of a responsible physician on medical claims based on alimitation selected from the group having a physician not identified asa hospital based physician or consulting physician and a physicianhaving a highest number of CPT codes; and means for assigning aclassification of a consulting physician who provides expertise in oneor more specialties to the responsible physician when such expertise isoutside the responsible physician's area of expertise and not alreadyidentified as a hospital based physician.
 52. The system of claim 50wherein said means for assigning said merged data to said healthcareprovider type comprises: means for assigning hospital based physiciansbased on a limitation selected from the group consisting of allphysicians having a surgical CPT code between 10000 and 69999 that areassociated with a surgical procedure; all physicians from the Radiologydepartment with a CPT code between 70000 and 79999 or between 93000 and93550; all physicians having a CPT code between 80000 and 89999; and allother physician line items that have a same physician ID identified as ahospital base physician; means for assigning said responsible physicianon surgical claims based on a limitation selected from the groupconsisting of: having a physician with a surgical CPT code (10000-69999)that is not identified as an anesthesiologist; having an inpatientadmission with a surgical CPT code (10000-69999) that has not beenalready identified as an anesthesiologist and said physician havinghighest charges; an inpatient admission with a surgical CPT code(10000-69999) that has not been already identified as ananesthesiologist; and as said physicians having the highest charges andhaving a highest number of CPT codes; means for assigning a responsiblephysician on medical claims based on a limitation selected from thegroup consisting of: having a physician not identified as a hospitalbased physician or consulting physician and a physician having a highestnumber of CPT codes; and means for assigning a consulting physicianbased on a limitation selected from the group consisting of allphysicians having a CPT code between 99251 and 99274 and not alreadyidentified as a hospital based physician and after the responsiblephysicians and hospital based physicians have been assigned remainingphysician line items.
 53. The system of claim 47 wherein said means fordetermining said incentive pool further comprises: means for allocatingsaid responsible physician incentive pool between a medical incentivepool and a surgical inventive pool based on a ratio of a total medicalpayments received for medical claims from said classified diagnosisrelated groups and a total of surgical payments received for surgicalclaims for said classified diagnosis related groups.
 54. The system ofclaim 53 wherein said means for determining said incentive pool furthercomprises: means for allocating said medical incentive pool between amedical improvement pool and a medical performance pool; and means forallocating said surgical incentive pool between a surgical improvementpool and a surgical performance pool.
 55. The system of claim 54 furthercomprising: means for subtracting a loss of income pool from saidresponsible physician incentive pool to form an adjusted responsiblephysician incentive pool; means for allocating said adjusted responsiblephysician incentive pool between said surgical incentive pool and saidmedical performance pool; and means for determining said medicalimprovement pool as said loss of income pool.
 56. The system of claim 55wherein said means for determining said incentive pool furthercomprises: means for determining a maximum medical performance incentiveper case for each classified diagnosis related group; means fordetermining a maximum medical improvement incentive per case for eachclassified diagnosis related group; means for determining a maximumsurgical performance incentive per case for each classified diagnosisrelated group; and means for determining a maximum surgical improvementincentive per case for each classified diagnosis related group.
 57. Thesystem of claim 56 further comprising: means for storing said determinedmaximum medical performance incentive per case for each classifieddiagnosis related group, determined maximum medical improvementincentive per case for each classified diagnosis related group,determined maximum surgical performance incentive per case for eachclassified diagnosis related group, and determined maximum surgicalimprovement incentive per case for each classified diagnosis relatedgroup.
 58. The system of claim 57 wherein said means for storing saiddetermined maximum medical performance incentive per case for eachclassified diagnosis related group, determined maximum medicalimprovement incentive per case for each classified diagnosis relatedgroup, determined maximum surgical performance incentive per case foreach classified diagnosis related group, and determined maximum surgicalimprovement incentive per case for each classified diagnosis relatedgroup comprises one or more databases.
 59. The system of claim 56wherein said physician performance is determined from current patientdata comprising current inpatient claim information and current hospitalcost data.
 60. The system of claim 59 wherein said means for determiningdistribution further comprises: means for determining a current costedpatient record from said current patient data; means for assigning oneof said classified diagnosis related groups to said current costedpatient record; means for assigning a responsible physician to saidcurrent costed patient record; and means for categorizing saidresponsible physician into a medical responsible physician or a surgicalresponsible physician based on said current costed patient record. 61.The system of claim 59 further comprising: means for establishingperformance ratio for said compared current physician performance forone of said classified diagnosis related groups to the established bestpractice norm for said one of said classified diagnosis related groupsand wherein said means for determining said incentive pool furthercomprises: means for applying said performance ratio to said maximummedical performance incentive per case to determine a medicalperformance incentive; and means for applying said performance ratio tosaid maximum surgical performance incentive per case to determine asurgical performance incentive.
 62. The system of claim 61 wherein saidmedical performance incentive and said surgical performance incentive isdetermined by:$\frac{{{Percentile}\quad {Cost}} - {{Physician}^{\prime}s\quad {Actual}\quad {Cost}}}{{{Percentile}\quad {Cost}} - {{Best}\quad {Practice}\quad {Cost}}} \times {Maximum}\quad {Physician}\quad {Incentive}$


63. The system of claim 62 wherein said percentile cost is a 90^(th)percentile cost.
 64. The system of claim 60 further comprising means forestablishing a ratio of improvement in operational performance andwherein said means for determining said incentive pool furthercomprises: means for applying said ratio of improvement in operationalperformance to said maximum medical improvement incentive per case todetermine a medical improvement incentive; and means for applying saidratio of improvement in operational performance to said maximum surgicalimprovement incentive per case to determine a medical improvementincentive.
 65. The system of claim 64 wherein said medical improvementincentive and said surgical improvement incentive is determined by:${\frac{{{Base}\quad {Year}} - {{Actual}\quad {Rate}\quad {Year}}}{{100^{th}\quad {Percentile}} - {{Best}\quad {Practice}}} \times {Per}\quad {{Case}\left( {{APR}\quad {DRG}} \right)}{Incentive}}\quad$


66. The system of claim 65 further comprising: means for determining atotal of said medical performance incentive, a total of said medicalimprovement incentive, a total of said surgical performance incentiveand a total of said surgical improvement incentive.
 67. The system ofclaim 65 further comprising means for generating a report of said totalmedical performance incentive and said total medical improvementincentive for each said responsible physician.
 68. The system of claim67 further comprising means for generating a report of said totalsurgical performance incentive and said total surgical improvementincentive for each said responsible physician.
 69. A method forevaluating physician economic performance comprising the steps of:establishing a best practice norm for a plurality of classifieddiagnosis related groups from base patient data; and determining saidphysician economic performance by comparing current physicianperformance associated with one of said classified diagnosis relatedgroups to the established best practice norm for one of said classifieddiagnosis related groups.
 70. The method of claim 69 wherein saidcurrent physician performance is determined from part B costs of auniform bill.
 71. The method of claim 69 wherein said base patient datacomprises inpatient data of a plurality of patients for one or morehospitals in a base time frame, said inpatient data comprises inpatientclaim information and hospital cost data.
 72. The method of claim 71wherein said inpatient claim information is determined for a uniformbill (UB).
 73. The method of claim 71 wherein said step of establishinga best practice norm comprises the steps of: a. determining a costedpatient record by combining said inpatient claim information and saidhospital cost data of a patient; b. assigning one of said classifieddiagnosis related groups to said costed patient record; c. assigning aresponsible physician to said costed patient record; d. repeating stepsa-c for each patient claim of said base patient data for determining anexpected cost statistic for each said classified diagnosis related groupto form said best practice norm.
 74. The method of claim 73 wherein saidstep of determining an expected cost statistic comprises the steps of:computing a normative expected cost statistic; determining for each ofsaid responsible physicians a difference of actual patient cost fromsaid normative expected cost statistic; ordering a list of all saidresponsible physicians in ascending order based on said differences ofactual patient cost from said normative expected cost statistic;determining a subset of physicians in said ordered list as physiciansmeeting a threshold of physician claims; and recomputing said normativeexpected cost statistic using said subset of physicians in said orderedlist and said difference of actual patient cost from said expected coststatistic.
 75. The method of claim 74 wherein the threshold of physicianclaims is 25% of a total number of inpatient claims.
 76. The method ofclaim 74 further comprising the step of: excluding said responsiblephysicians from said ordered list if each of said responsible physicianshas a number of cases for said classified diagnosis group which is lessthan a threshold of a number of physician cases.
 77. The method of claim76 wherein the threshold of a number of physician cases is less thanthree cases.
 78. The method of claim 74 wherein before said recomputingstep, further comprising the step of: determining if a number of saidresponsible physicians for said classified diagnosis related groups isgreater than a threshold of a number of physicians meeting a selectioncriteria, and if said determined number of responsible physicians isgreater than said threshold of a number of physicians meeting aselection criteria then performing said recomputing step, or if saiddetermined number of responsible physicians is not greater than saidthreshold of a number of physicians meeting a selection criteria;indicating that said recomputed expected cost statistic is not said bestpractice norm.
 79. The method of claim 78 wherein before saidrecomputing step, further comprising the step of: determining a minimumnumber of claims for each classified diagnosis related group, and if adetermined number of claims for said classified diagnosis related groupis greater than said minimum number of claims then performing saidrecomputing step or if a determined number of claims for said classifieddiagnosis related group is less than said minimum number of claims;indicating that said recomputed expected cost statistic is not said bestpractice norm.
 80. The method of claim 69 further comprising the stepof: adjusting said classified diagnosis related groups for severity ofillness.
 81. The method of claim 69 wherein said classified diagnosisrelated groups are determined as an All Patient Refined DiagnosisRelated Group.
 82. The method of claim 69 further comprising:determining a weight or percentage of a type of healthcare provider forsaid classified diagnosis related group, said type of healthcareprovider comprising a responsible physician, consultant physician andhospital based physician; and determining a percentage of a sum ofclaims associated with said responsible physician by said classifieddiagnosis related group to a total percentage of physician claims ofsaid responsible physician, said consultant physician and said hospitalbased physician to determine a percentage of responsible physicianclaims.
 83. The method of claim 79 wherein said step of determining aweight or percentage of a type of healthcare provider type comprises thesteps of: k. inputting data of inpatient claims for a plurality ofpatients, l. classifying said inpatient claim into one of said diagnosisrelated groups, m. inputting physician billing data associated with saidclassified inpatient claim, n. linking said classified inpatient claimto said physician billing data to form merged data of said physicianbilling data and said classified inpatient claim, o. assigning saidmerged data to one of said healthcare provider types, and p. repeatingsteps k-o for each inpatient claim.
 84. The method of claim 83 whereinsaid step of assigning said merged data to said healthcare provider typecomprises the steps of: assigning a classification of hospital basedphysicians selected from the group consisting of physicians who performa surgical procedure, comprising operative manual methods, incision(s)of the body, internal manipulation and/or removal of a diseased organ ortissue; physicians who use ionizing radiation, radioactive substances ormagnetic resonance in the diagnosis and treatment of disease; andphysicians who perform scientific studies on blood, body fluids, tissueand microscopic organisms for the purpose of diagnosis of illness anddisease; assigning a classification of said responsible physician onsurgical claims selected from the group consisting of physicians whoperform a surgical procedure, comprising operative manual methods,incision(s) of the body, internal manipulation and/or removal of adiseased organ or tissue that are not identified as an anesthesiologist,said physicians having highest charges and said physicians having thehighest charges and having a highest number of CPT codes; assigning aclassification of a responsible physician on medical claims based on alimitation selected from the group having a physician not identified asa hospital based physician or consulting physician and a physicianhaving a highest number of CPT codes; and assigning a classification ofa consulting physician who provides expertise in one or more specialtiesto the responsible physician when such expertise is outside theresponsible physician's area of expertise and not already identified asa hospital based physician.
 85. The method of claim 83 wherein said stepof assigning said merged data to said healthcare provider type comprisesthe steps of: assigning hospital based physicians based on a limitationselected from the group consisting of: all physicians having a surgicalCPT code 10000-69999 that are associated with a surgical procedure; allphysicians from the Radiology department with a CPT code between 70000and 79999 or between 93000 and 93550; all physicians having a CPT codebetween 80000 and 89999; and all other physician line items that have asame physician ID identified as a hospital based physician; assigningsaid responsible physician on surgical claims based on a limitationselected from the group consisting of: having a physician with asurgical CPT code (10000-69999) that is not identified as ananesthesiologist; having an inpatient admission with a surgical CPT code(10000-69999) that has not been already identified as ananesthesiologist; and said physician having highest charges; aninpatient admission with a surgical CPT code (10000-69999) that has notbeen already identified as an anesthesiologist; and as said physicianshaving the highest charges and having a highest number of CPT codes;assigning a responsible physician on medical claims based on alimitation selected from the group consisting of: having a physician notidentified as a hospital based physician or consulting physician and aphysician having a highest number of CPT codes; and assigning aconsulting physician based on a limitation selected from the group ofall physicians having a CPT code between 99251 and 99274 and not alreadyidentified as a hospital based physician and after the responsiblephysicians and hospital based physicians have been assigned remainingphysician line items.
 86. The method of claim 69 wherein said step ofdetermining said physician economic performance further comprises thesteps of: determining a current costed patient record from said currentpatient data; assigning one of said classified diagnosis related groupsto said current costed patient record; assigning said healthcareprovider type to said current costed patient record; categorizing saidhealthcare provider type into a medical responsible physician or asurgical responsible physician based on said current costed patientrecord; and determining said physician economic performance for eachsaid healthcare provider type.
 87. The method of claim 69 furthercomprising generating a report of said established physician economicperformance.
 88. A system for evaluating physician economic performancecomprising: means for establishing a best practice norm for a pluralityof classified diagnosis related groups from base patient data; and meansfor determining said physician economic performance by comparing currentphysician performance associated with one of said classified diagnosisrelated groups to the established best practice norm for one of saidclassified diagnosis related groups.
 89. The system of claim 88 whereinsaid base patient data comprises inpatient data of a plurality ofpatients for one or more hospitals in a base time frame, said inpatientdata comprises inpatient claim information and hospital cost data. 90.The system of claim 89 wherein said inpatient claim information isdetermined for a uniform bill (UB).
 91. The system of claim 88 whereinsaid current physician performance is determined from part B costs of auniform bill.
 92. The system of claim 2 wherein said step ofestablishing a best practice norm comprises: means for determining acosted patient record by combining said inpatient claim information andsaid hospital cost data of a patient; means for assigning one of saidclassified diagnosis related groups to said costed patient record; meansfor assigning a responsible physician to said costed patient record;means for repeating for each patient claim of said base patient data fordetermining an expected cost statistic for each said classifieddiagnosis related group to form said best practice norm.
 93. The systemof claim 92 wherein said means for determining an expected coststatistic comprises: means for computing a normative expected coststatistic; means for determining for each of said responsible physiciansa difference of actual patient cost from said normative expected coststatistic; means for ordering a list of all said responsible physiciansin ascending order based on said differences of actual patient cost fromsaid normative expected cost statistic; means for determining a subsetof physicians in said ordered list as physicians meeting a threshold ofphysician claims; and means for recomputing said normative expected coststatistic using said subset of physicians in said ordered list and saiddifference of actual patient cost from said expected cost statistic. 94.The system of claim 93 wherein the threshold of physician claims is 25%of a total number of inpatient claims.
 95. The system of claim 93further comprising: means for excluding said responsible physicians fromsaid ordered list if each of said responsible physicians has a number ofcases for said classified diagnosis group which is less than a thresholdof a number of physician cases.
 96. The system of claim 95 wherein thethreshold of a number of physician cases is less than three cases. 97.The system of claim 93 further comprising: means for determining if anumber of said responsible physicians for said classified diagnosisrelated groups is greater than a threshold of a number of physiciansmeeting a selection criteria, and if said determined number ofresponsible physicians is greater than said threshold of a number ofphysicians meeting a selection criteria then performing said recomputingstep, or if said determined number of responsible physicians is notgreater than said threshold of a number of physicians meeting aselection criteria; means for indicating that said recomputed expectedcost statistic is not said best practice norm.
 98. The system of claim97 further comprising: means for determining a minimum number of claimsfor each classified diagnosis related group, and if a determined numberof claims for said classified diagnosis related group is greater thansaid minimum number of claims then performing said recomputing step orif a determined number of claims for said classified diagnosis relatedgroup is less than said minimum number of claims; means for indicatingthat said recomputed expected cost statistic is not said best practicenorm.
 99. The system of claim 88 further comprising: means for adjustingsaid classified diagnosis related groups for severity of illness. 100.The system of claim 88 wherein said classified diagnosis related groupsare determined as an All Patient Refined Diagnosis Related Group. 101.The system of claim 88 further comprising: means for determining aweight or percentage of a type of healthcare provider for saidclassified diagnosis related group, said type of healthcare providercomprising a responsible physician, consultant physician and hospitalbased physician; and means for determining a percentage of a sum ofclaims associated with said responsible physician by said classifieddiagnosis related group to a total percentage of physician claims ofsaid responsible physician, said consultant physician and said hospitalbased physician to determine a percentage of responsible physicianclaims.
 102. The system of claim 101 wherein said means for determininga weight or percentage of a type of healthcare provider type comprises:means for inputting data of inpatient claims for a plurality ofpatients, means for classifying said inpatient claim into one of saiddiagnosis related groups, means for inputting physician billing dataassociated with said classified inpatient claim, means for linking saidclassified inpatient claim to said physician billing data to form mergeddata of said physician billing data and said classified inpatient claim,means for assigning said merged data to one of said healthcare providertypes.
 103. The system of claim 101 wherein said means for assigningsaid merged data to said healthcare provider type comprises: means forassigning a classification of hospital based physicians selected fromthe group consisting of physicians who perform a surgical procedure,comprising operative manual methods, incision(s) of the body, internalmanipulation and/or removal of a diseased organ or tissue; physicianswho use ionizing radiation, radioactive substances or magnetic resonancein the diagnosis and treatment of disease; and physicians who performscientific studies on blood, body fluids, tissue and microscopicorganisms for the purpose of diagnosis of illness and disease; means forassigning a classification of said responsible physician on surgicalclaims selected from the group consisting of physicians who perform asurgical procedure, comprising operative manual methods, incision(s) ofthe body, internal manipulation and/or removal of a diseased organ ortissue that are not identified as an anesthesiologist, said physicianshaving highest charges and said physicians having the highest chargesand having a highest number of CPT codes; means for assigning aclassification of a responsible physician on medical claims based on alimitation selected from the group having a physician not identified asa hospital based physician or consulting physician and a physicianhaving a highest number of CPT codes; and means for assigning aclassification of a consulting physician who provides expertise in oneor more specialties to the responsible physician when such expertise isoutside the responsible physician's area of expertise and not alreadyidentified as a hospital based physician.
 104. The system of claim 101wherein said means for assigning said merged data to said healthcareprovider type comprises: means for assigning hospital based physiciansbased on a limitation selected from the group consisting of: allphysicians having a surgical CPT code 10000-69999 that are associatedwith a surgical procedure; all physicians from the Radiology departmentwith a CPT code between 70000 and 79999 or between 93000 and 93550; allphysicians having a CPT code between 80000 and 89999; and all otherphysician line items that have a same physician ID identified as ahospital based physician; means for assigning said responsible physicianon surgical claims based on a limitation selected from the groupconsisting of: having a physician with a surgical CPT code (10000-69999)that is not identified as an anesthesiologist; having an inpatientadmission with a surgical CPT code (10000-69999) that has not beenalready identified as an anesthesiologist; and as said physicians havingthe highest charges and having a highest number of CPT codes; means forassigning a responsible physician on medical claims based on alimitation selected from the group consisting of: having a physician notidentified as a hospital based physician or consulting physician and aphysician having a highest number of CPT codes; and means for assigninga consulting physician based on a limitation selected from the group ofall physicians having a CPT code between 99251 and 99274 and not alreadyidentified as a hospital based physician and after the responsiblephysicians and hospital based physicians have been assigned remainingphysician line items.
 105. The system of claim 101 wherein said meansfor determining said physician economic performance further comprises:means for determining a current costed patient record from said currentpatient data; means for assigning one of said classified diagnosisrelated groups to said current costed patient record; means forassigning said healthcare provider type to said current costed patientrecord; means for categorizing said healthcare provider type into amedical responsible physician or a surgical responsible physician basedon said current costed patient record; and means for determining saidphysician economic performance for each said healthcare provider type.106. The system of claim 105 further comprising generating a report ofsaid established physician economic performance.